SABYASACHI MUKHARJI, J.

( 1 ) THIS is a reference under Section 66 (2) or the Indian Income-tax Act, 1922, for determination of the following question :"whether, on the facts and in the circumstances of the case, the sum of rupees one lakh, eleven thousand, seven hundred and seventy-nine, said to have been forgone by the assessee as managing agency commission was allowable as a revenue expenditure under Section 10 (2) (xv) of the Indian Income-tax Act, 1922, for the assessment year 1954-55? "

( 2 ) THE assessment year concerned in this reference is 1954-55, the corresponding previous year being the financial year ended 31st March, 1954. The assessee, the Birla Bros. (Gwalior) Ltd. (now Birla Gwalior Private Ltd.), is a private limited company and acts as managing agents of several other limited liability companies. Under the managing agency agreement between the assessee-company and the managed company, the assessee-company was entitled to receive a commission @ 12 1/2 per cent. on the net profits of the managed company together with a sum of Rs. 18,000 for office allowance. The accounting year of both the managed company and the managing agents ended on the 31st of March, each ye

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